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Katrina: Watershed for Bush
September 14, 2005
From late August till early September, I happened to be in the United States, when Hurricane Katrina hit the US Gulf coast and devastated the city of New Orleans.
It was a horrifying, searing and humbling experience, a veritable Greek tragedy of foretold doom and human failure in the face of immense riches and resources, but with the victims the lame and the meek rather than the rich and the powerful.
The storm hit the Gulf Coast on August 29. The initial sensation was confused: something major had clearly happened, but its larger significance and implications were not clear. Even the media on the first day were relatively sanguine, before the full scale of the loss became known.
While for other affected communities on the Gulf Coast, particularly in the state of Mississippi, the hurricane itself was the key tragedy; in the case of New Orleans, it was the breaching of the dikes (levees) following the main storm; on the side of the city that faces Lake Pontchartrain, that was the decisive event.
While the damage to other Gulf Coast communities has been just as grave as to New Orleans, most of the media attention has been paid to the fate of those stranded in New Orleans and the failure of various levels of government (city, state, and federal) to provide for and protect them in their hour of need.
While the most obvious consequences for India are through the impact on the international economy, most official commentators believe that the long-term effects on both the US and the international economy will be relatively minor.
The main channel of influence will probably be via the effect on global oil prices, but the depressive effects of this can to some degree be offset by a loosening (or delayed tightening) of the monetary policy led by the US Federal Reserve.
This indeed has been the recommendation of the Organisation of Economic Co-operation and Development (OECD). We will see if the central banks of the world oblige. Accordingly, the more important and enduring issues are in the social, administrative and political realms.
Turning first to the social, two features have been widely noted.
The first was the scale and size of the (largely black) underclass, particularly in New Orleans, who were disproportionately represented among those who were unable to evacuate; the second the breakdown in law and order.
Having always thought of Louisiana as a relative economic backwater, I was extremely surprised to learn of the economic importance of both the state and the adjoining region, particularly in the energy and transportation fields.
The western Gulf of Mexico accounts for a quarter of America's crude output and 17 per cent of the nation's refining capacity. The port of New Orleans is a crucial link in the grain and oil trade of the US mid-west and the city is an important centre for products as diverse as oysters and coffee roasting.
Yet, what would, by Indian standards, be considered an industrial powerhouse (Gujarat would be an analogy) seems nonetheless to have been characterised by significant economic duality and desperation, with a poverty rate almost double the US national average. Clearly, the backward linkages from this pattern of growth have been far smaller than one might expect.
The breakdown of law and order was apparently city-wide, but was particularly dismaying in the two large concentrations of the stranded, the Superdome (a covered sports arena), where some 25,000 souls, largely children, female and elderly, took refuge as part of the formal evacuation plan, and the New Orleans Convention Centre, where another 15,000 persons gathered apparently without the awareness or knowledge of the lead federal rescue agency, the Federal Emergency Management Agency.
In addition to their other woes, the stranded had to cope with harassment, theft, rape, child abuse and murder in an environment without power, light or sanitation, where the police essentially gave up until federal resources arrived to relieve them several days later.
The current estimate is that 10 persons died while at the Superdome and 24 at the Convention Centre through a mix of illness, dehydration and violence.
Here one is tempted to draw a contrast with Mumbai in the floods, where, to my knowledge, the social breakdown was restricted primarily to some eve teasing. It is important not to be too superior; we do after all have our own tradition of religious riots, which rightly appal the rest of the world.
But it does seem that the widespread availability of firearms in American society levels the playing field between the police and anti-social elements more evenly, such that in the absence of an adequate show of force, which was impossible under the present circumstances, the police were helpless.
In the administrative sphere, what was remarkable was the apparent lack of co-ordination between city, state and federal levels.
As with the case of the Florida electoral count at the time of the Presidential election in 2000, the disarray in New Orleans provided an unedifying demonstration of the less successful dimensions of US federalism, with the three jurisdictions quarrelling with each other, and with the army reluctant to intervene for both constitutional and manpower reasons.
What has become clear is that, despite significant efforts to improve disaster response after the confusion of September 11 four years ago, perceptible improvement has been at best slight. If the tsunami is anything to go by, we do seem to manage such co-ordination somewhat better in India, although much does depend on the quality of state leadership and of state administration.
This finally brings me to the political sphere. Rightly or wrongly, the slow response to Katrina is being seen primarily as a federal failure, particularly of the department of homeland security, which was a creation of President Bush in his first term.
The mismanagement of the rescue effort further damages an already dwindling reputation for effective management by White House, reflected in low approval ratings for the President.
Accordingly, President Bush is now short of political capital and will need to be careful how he spends it. The hearings on the nuclear deal between the US and India that are just starting on Capitol Hill were always going to be a tough sell. The events of the last fortnight probably mean that the passage will be even rougher.
Suman Bery is the Director General of the National Council of Applied Economic Research. The views expressed are his own.